A-15190, A-17340, SEPTEMBER 16, 1927, 7 COMP. GEN. 213

A-15190,A-17340: Sep 16, 1927

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NO ADVANCES ARE AUTHORIZED BY THE ACTS OF JANUARY 22. TO BE MADE FOR THE PURPOSE OF SECURING EVIDENCE OF VIOLATIONS OF THE NATIONAL PROHIBITION ACT UNLESS SUCH ADVANCES ARE AUTHORIZED BY THE COMMISSIONER OF INTERNAL REVENUE AND APPROVED BY THE SECRETARY OF THE TREASURY. CREDIT WILL NOT BE ALLOWED FOR ADVANCES MADE WITHOUT SUCH AUTHORIZATION AND APPROVAL. FOR SECURING EVIDENCE OF VIOLATIONS OF THE NATIONAL PROHIBITION ACT ARE NOT AVAILABLE FOR THE OPERATION OF A "SPEAKEASY" FOR THE SALE OF INTOXICATING LIQUORS IN VIOLATION OF BOTH THE EIGHTEENTH AMENDMENT TO THE CONSTITUTION AND THE NATIONAL PROHIBITION ACT. 1927: THERE IS BEFORE THIS OFFICE FOR CONSIDERATION IN THE ACCOUNTS OF DISBURSING CLERKS J.

A-15190, A-17340, SEPTEMBER 16, 1927, 7 COMP. GEN. 213

PROHIBITION ENFORCEMENT - INFORMERS AND UNDERCOVER AGENTS - SALARY AND EXPENSES UNDER ARTICLE 1, SECTION 9, OF THE CONSTITUTION AND SECTIONS 3678 AND 3732 OF THE REVISED STATUTES, NO MONEYS MAY BE PAID FROM THE TREASURY EXCEPT FOR PURPOSES AUTHORIZED BY LAW, AND CREDIT MAY NOT BE ALLOWED FOR EXPENDITURES NOT ONLY UNAUTHORIZED BY LAW BUT IN CONTRAVENTION OF EXPRESS STATUTES. UNDER EXISTING LAW A PROHIBITION INFORMER OR UNDERCOVER AGENT MAY NOT BE PAID, UNDER CONTRACT OR OTHERWISE, IN EXCESS OF $7,500 PER ANNUM FOR BOTH SALARY AND PER DIEM EXPENSES AT HEADQUARTERS. NO ADVANCES ARE AUTHORIZED BY THE ACTS OF JANUARY 22, 1924, 43 STAT. 771, AND MARCH 2, 1926, 44 STAT. 143, TO BE MADE FOR THE PURPOSE OF SECURING EVIDENCE OF VIOLATIONS OF THE NATIONAL PROHIBITION ACT UNLESS SUCH ADVANCES ARE AUTHORIZED BY THE COMMISSIONER OF INTERNAL REVENUE AND APPROVED BY THE SECRETARY OF THE TREASURY. CREDIT WILL NOT BE ALLOWED FOR ADVANCES MADE WITHOUT SUCH AUTHORIZATION AND APPROVAL. THE APPROPRIATIONS CONTAINED IN THE ACTS OF JANUARY 22, 1925, 43 STAT. 771, AND MARCH 2, 1926, 44 STAT. 143, FOR SECURING EVIDENCE OF VIOLATIONS OF THE NATIONAL PROHIBITION ACT ARE NOT AVAILABLE FOR THE OPERATION OF A "SPEAKEASY" FOR THE SALE OF INTOXICATING LIQUORS IN VIOLATION OF BOTH THE EIGHTEENTH AMENDMENT TO THE CONSTITUTION AND THE NATIONAL PROHIBITION ACT.

DECISION BY COMPTROLLER GENERAL MCCARL, SEPTEMBER 16, 1927:

THERE IS BEFORE THIS OFFICE FOR CONSIDERATION IN THE ACCOUNTS OF DISBURSING CLERKS J. L. SUMMERS, L. G. NUTT, AND VINCENT D. SIMONTON THE QUESTION OF CREDIT FOR CERTAIN PAYMENTS MADE BY THEM DURING THE PERIOD FROM MAY 15, 1925, TO NOVEMBER 30, 1926, EITHER DIRECTLY OR IN REIMBURSEMENT OF SUMS PAID BY WALTER A. GREEN, CHIEF PROHIBITION INVESTIGATOR, TO A. BRUCE BIELASKI, AND A CLAIM OF MR. BIELASKI FOR SIMILAR PAYMENTS FOR THE PERIOD FROM DECEMBER 1, 1926, TO MARCH 15, 1927, ALLEGED TO BE CHARGEABLE TO THE APPROPRIATIONS FOR THE ENFORCEMENT OF THE NARCOTIC AND NATIONAL PROHIBITION ACTS. THESE ITEMS WERE FOR SALARIES AND CERTAIN EXPENSES AS HEREINAFTER STATED, AND THE QUESTION FOR DECISION IS WHETHER THE EXPENDITURES CONSTITUTE LEGAL AND PROPER CHARGES UNDER THE APPROPRIATIONS CHARGED, OR ANY OTHERS.

ARTICLE 1, SECTION 9, OF THE CONSTITUTION OF THE UNITED STATES, PROVIDED THAT NO MONEY SHOULD BE DRAWN FROM THE TREASURY SAVE IN CONSEQUENCE OF AN APPROPRIATION MADE BY LAW, AND SECTION 3678, REVISED STATUTES, PROVIDED THAT ALL MONEYS APPROPRIATED FOR THE VARIOUS BRANCHES OF EXPENDITURE IN THE PUBLIC SERVICE SHALL BE APPLIED SOLELY TO THE OBJECTS FOR WHICH THEY ARE RESPECTIVELY MADE, AND FOR NO OTHERS; WHILE SECTION 3732, REVISED STATUTES, PROVIDED THAT, WITH CERTAIN EXCEPTIONS NOT HERE MATERIAL, NO CONTRACT OR PURCHASE ON BEHALF OF THE UNITED STATES SHALL BE MADE UNLESS THE SAME IS AUTHORIZED BY LAW OR IS UNDER AN APPROPRIATION ADEQUATE TO ITS FULFILLMENT. THOSE PROVISIONS OF LAW ARE NOT ONLY LIMITATIONS ON THE AUTHORITY OF ADMINISTRATIVE OFFICERS, INCLUDING THOSE CHARGED WITH THE ENFORCEMENT OF THE NATIONAL PROHIBITION ACT, BUT ARE ALSO LIMITATIONS ON THE AUTHORITY OF THIS OFFICE TO ALLOW CREDIT FOR PAYMENTS MADE OR CLAIMED FROM APPROPRIATED MONEYS.

WITH THESE PRELIMINARY CONSIDERATIONS, WHICH DO NOT ALWAYS APPEAR TO BE APPRECIATED, THERE ARE FOR CONSIDERATION THE FACTS IN THIS CASE AND THE ACTS OF JANUARY 22, 1925, 43 STAT. 771, AND MARCH 2, 1926, 44 STAT. 143, 144, MAKING APPROPRIATIONS FOR THE ENFORCEMENT OF THE PROVISIONS OF THE NARCOTIC AND NATIONAL PROHIBITION ACTS DURING THE FISCAL YEARS 1926 AND 1927, RESPECTIVELY. AS TO THE CLASS OF EXPENDITURES AUTHORIZED TO BE MADE UNDER THESE TWO APPROPRIATIONS, THE PROVISIONS ARE IDENTICAL EXCEPT AS TO AMOUNTS, AND THEIR SCOPE MAY BE INDICATED BY THE FOLLOWING QUOTATION FROM THE ACT OF MARCH 2, 1926:

FOR EXPENSES * * * INCLUDING THE EMPLOYMENT OF EXECUTIVE OFFICERS, AGENTS, INSPECTORS, CHEMISTS, ASSISTANT CHEMISTS, SUPERVISORS, CLERKS, AND MESSENGERS IN THE FIELD AND IN THE BUREAU OF INTERNAL REVENUE IN THE DISTRICT OF COLUMBIA, TO BE APPOINTED AS AUTHORIZED BY LAW; NOT TO EXCEED $50,000 FOR THE COLLECTION AND DISSEMINATION OF INFORMATION ON LAW ENFORCEMENT, INCLUDING THE NECESSARY PRINTING IN CONNECTION THEREWITH; THE SECURING OF EVIDENCE OF VIOLATIONS OF THE ACTS; THE PURCHASE OF SUCH SUPPLIES, EQUIPMENT, MECHANICAL DEVICES, LABORATORY SUPPLIES, BOOKS, AND SUCH OTHER EXPENDITURES AS MAY BE NECESSARY IN THE DISTRICT OF COLUMBIA AND THE SEVERAL FIELD OFFICES; HIRE, MAINTENANCE, REPAIR, AND OPERATION OF MOTOR-PROPELLED OR HORSE-DRAWN PASSENGER-CARRYING VEHICLES WHEN NECESSARY; AND FOR RENTAL OF NECESSARY QUARTERS; IN ALL, $10,635,685, OF WHICH AMOUNT NOT TO EXCEED $598,640 MAY BE EXPENDED FOR PERSONAL SERVICES IN THE DISTRICT OF COLUMBIA * * *: PROVIDED FURTHER, THAT NOT TO EXCEED $250,000 OF THE TOTAL AMOUNT APPROPRIATED SHALL BE AVAILABLE FOR ADVANCES TO BE MADE BY SPECIAL DISBURSING AGENTS WHEN AUTHORIZED BY THE COMMISSIONER OF INTERNAL REVENUE AND APPROVED BY THE SECRETARY OF THE TREASURY, THE PROVISIONS OF SECTION 3648 OF THE REVISED STATUTES TO THE CONTRARY NOTWITHSTANDING, AND $50,000 OF THIS SUM SHALL BE AVAILABLE IMMEDIATELY: *

THE ACT OF JANUARY 22, 1925, 43 STAT. 764, ALSO PROVIDED THAT---

THOSE CIVILIAN POSITIONS IN THE FIELD SERVICES UNDER THE SEVERAL EXECUTIVE DEPARTMENTS AND INDEPENDENT ESTABLISHMENTS, THE COMPENSATION OF WHICH WAS FIXED OR LIMITED BY LAW BUT ADJUSTED FOR THE FISCAL YEAR 1925 UNDER THE AUTHORITY AND APPROPRIATIONS CONTAINED IN THE ACT ENTITLED "AN ACT MAKING ADDITIONAL APPROPRIATIONS FOR THE FISCAL YEAR ENDING JUNE 30, 1925, TO ENABLE THE HEADS OF THE SEVERAL EXECUTIVE DEPARTMENTS AND INDEPENDENT ESTABLISHMENTS TO ADJUST THE RATES OF COMPENSATION OF CIVILIAN EMPLOYEES IN CERTAIN OF THE FIELD SERVICES," APPROVED DECEMBER 6, 1924, MAY BE PAID UNDER THE APPLICABLE APPROPRIATIONS FOR THE FISCAL YEAR 1926 AT RATES NOT IN EXCESS OF THOSE PERMITTED FOR THEM UNDER THE PROVISIONS OF SUCH ACT OF DECEMBER 6, 1924.

LIKE PROVISION FOR THE FISCAL YEAR 1927 WAS MADE IN THE ACT OF MARCH 2, 1926, 44 STAT. 143.

THE ACT OF DECEMBER 6, 1924, 43 STAT. 704, REFERRED TO, AUTHORIZED THE HEADS OF THE SEVERAL EXECUTIVE DEPARTMENTS AND INDEPENDENT ESTABLISHMENTS "TO ADJUST THE COMPENSATION OF CIVILIAN EMPLOYEES IN CERTAIN FIELD SERVICES TO CORRESPOND, SO FAR AS MAY BE PRACTICABLE, TO THE RATES ESTABLISHED BY THE CLASSIFICATION ACT OF 1923 FOR POSITIONS IN THE DEPARTMENTAL SERVICES IN THE DISTRICT OF COLUMBIA.' SAID CLASSIFICATION ACT, 42 STAT. 1488, PROVIDED FOR THE GRADING OF POSITIONS IN THE DEPARTMENTAL SERVICE AND (P. 1496) FIXED THE HIGHEST SALARY OF THE HIGHEST GRADE IN THE DEPARTMENTAL SERVICE AT $7,500 PER YEAR "UNLESS A HIGHER RATE IS SPECIFICALLY AUTHORIZED BY LAW.'

THIS OFFICE HELD IN DECISION DATED FEBRUARY 26, 1927 (A-17340), IN THIS MATTER, FOLLOWING 4 COMP. GEN. 1077, AND NUMEROUS DECISIONS IN SIMILAR CASES, THAT IN THE ABSENCE OF A SPECIFIC STATUTORY AUTHORIZATION, THE MAXIMUM COMPENSATION THAT COULD BE PAID TO A. BRUCE BIELASKI OR ANY OTHER FIELD EMPLOYEE FOR THE ENFORCEMENT OF THE NATIONAL PROHIBITION ACT WAS $7,500 PER ANNUM.

PRIOR TO SECTION 5/B) OF THE ACT OF MARCH 3, 1927, 44 STAT. 1382, FIELD EMPLOYEES OF THE PROHIBITION ENFORCEMENT SERVICE WERE NOT REQUIRED TO BE APPOINTED SUBJECT TO THE PROVISIONS OF THE CIVIL SERVICE LAW, AND THE PERSONAL SERVICE OF SUCH EMPLOYEES COULD BE OBTAINED IN ANY MANNER DEEMED PROPER, SUBJECT TO CERTAIN RESTRICTIONS AS TO COMPENSATION. THE CONTRACT OF MAY 15, 1925, IN THIS CASE BETWEEN THE ASSISTANT SECRETARY OF THE TREASURY, LINCOLN C. ANDREWS, AND A. BRUCE BIELASKI WAS IN FACT AND IN LAW AN EMPLOYMENT, FINDING ITS SOLE AUTHORIZATION IN THE ACTS OF JANUARY 22, 1925, AND MARCH 3, 1926, SUPRA, MAKING APPROPRIATIONS FOR THE ENFORCEMENT OF THE PROHIBITION ACT AND NECESSARILY WAS SUBJECT TO THE LIMITATIONS THEREIN CONTAINED ON THE MAXIMUM COMPENSATION OF $7,500 PAYABLE UNDER SUCH EMPLOYMENT. WHILE THE CONTRACT PURPORTED TO STIPULATE FOR PAYMENT OF COMPENSATION ON A CASE BASIS, NOT TO EXCEED $12,000 A YEAR AND EXPENSES AT THE RATE OF $4 PER DIEM WHEN STATIONED IN NEW YORK CITY AT HIS HEADQUARTERS, HE IN FACT PAID HIMSELF AT THE RATE OF $1,000 PER MONTH AND EXPENSES OF $4 PER DIEM WITHOUT REGARD TO THE NUMBER OR CHARACTER OF CASES INVESTIGATED BY HIM, AND IT WAS NOT UNTIL JUNE 30, 1927, THAT ASSISTANT SECRETARY OF THE TREASURY LINCOLN C. ANDREWS ATTEMPTED TO COMPUTE AND FIX THE COMPENSATION FOR THE PERIOD FROM MAY 15, 1925, TO JUNE 30, 1927, ON A CASE BASIS. EVEN PRIOR TO MARCH 3, 1927, THERE WAS NO AUTHORIZATION IN THE APPROPRIATION ACTS FOR THE ENFORCEMENT OF PROHIBITION FOR THE EMPLOYMENT OF INVESTIGATORS OR UNDERCOVER MEN ON A CASE BASIS, SIMILAR TO THE AUTHORIZATION CONTAINED IN DEPARTMENT OF JUSTICE APPROPRIATION ACTS FOR THE EMPLOYMENT OF SPECIAL ASSISTANTS TO THE ATTORNEY GENERAL AND TO THE UNITED STATES ATTORNEYS TO ASSIST IN SPECIAL CASES. SEE ACT OF FEBRUARY 24, 1927, 44 STAT. 1196, AND SIMILAR PROVISIONS IN PRIOR ACTS, AUTHORIZING THE ATTORNEY GENERAL TO EMPLOY SUCH SPECIAL ASSISTANTS BUT LIMITING THE COMPENSATION TO SUCH PERSON AT A SUM NOT TO EXCEED $10,000 PER YEAR. BUT IN ANY EVENT, THE SUMS LEGALLY PAYABLE UNDER THE APPROPRIATION FOR THE ENFORCEMENT OF THE PROHIBITION ACT, WHETHER ON A MONTHLY SALARY BASIS OR ON A CASE BASIS OR OTHERWISE, WERE LIMITED BY THE TERMS OF THE APPROPRIATION ACTS THEMSELVES TO THE RATE OF $7,500 PER ANNUM.

UNDER THE SUBSISTENCE EXPENSE ACT OF 1926, 44 STAT. 688, AND THE PRIOR ACTS OF APRIL 6, 1914, 38 STAT. 318, AND AUGUST 1, 1914, 38 STAT. 680, NEITHER EXPENSES OF SUBSISTENCE NOR TRAVEL ARE PAYABLE TO AN EMPLOYEE AT HIS HEADQUARTERS, AND, CONSEQUENTLY, ANY SUMS PAID TO MR. BIELASKI AS EXPENSES OF SUBSISTENCE OR TRAVEL IN NEW YORK CITY AT HIS HEADQUARTERS MUST BE COMPUTED AS A PART OF HIS COMPENSATION, THE TOTAL OF WHICH, AS HEREINABOVE SHOWN, IS LIMITED BY LAW TO A SUM NOT EXCEEDING $7,500 PER ANNUM.

THE ACCOUNT OF MR. BIELASKI WILL BE STATED FOR THE ENTIRE PERIOD OF HIS EMPLOYMENT AND HE WILL BE CHARGED WITH ALL SUMS RECEIVED BY HIM, WHETHER FOR SALARY OR PER DIEM IN NEW YORK CITY, IN EXCESS OF AN AGGREGATE OF $7,500 PER YEAR. ANY SUMS REMAINING UNPAID MR. BIELASKI AT THE RATE OF $7,500 PER YEAR FOR BOTH SALARY AND PER DIEM EXPENSES TO FEBRUARY 28, 1927, WHEN, WITH THE APPARENT APPROVAL OF ASSISTANT SECRETARY OF THE TREASURY ANDREWS (SEE HIS LETTER OF JULY 30, 1927), THE ACTING COMMISSIONER OF INTERNAL REVENUE APPROVED THE CONTRACT "FOR PAYMENT IN AN AMOUNT NOT TO EXCEED $6,000 PER ANNUM," AND ANY SIMILAR SUMS AT THE RATE OF NOT EXCEEDING $6,000 PER YEAR FOR BOTH SALARY AND PER DIEM EXPENSES FOR SERVICES RENDERED AFTER FEBRUARY 28, 1927, WILL BE ALLOWED AND CREDITED AGAINST THE SUMS ERRONEOUSLY PAID HIM DURING THE PERIOD PRIOR TO DECEMBER 1, 1926, IN EXCESS OF AN AGGREGATE OF $7,500 PER ANNUM.

IT WILL BE NOTED THAT THE ABOVE-QUOTED PROVISIONS OF THE ACTS OF JANUARY 22, 1925, AND MARCH 2, 1926, REQUIRE ANY ADVANCES MADE FOR THE PURPOSE OF SECURING EVIDENCE OF VIOLATIONS OF THE NATIONAL PROHIBITION ACT TO BE AUTHORIZED BY THE COMMISSIONER OF INTERNAL REVENUE AND APPROVED BY THE SECRETARY OF THE TREASURY. SEE DECISION DATED FEBRUARY 1, 1927 (A-17242), OF THIS OFFICE, TO THE SECRETARY OF THE TREASURY. IT DOES NOT APPEAR FROM THE RECORD BEFORE ME WHETHER THE COMMISSIONER OF INTERNAL REVENUE AUTHORIZED AND THE SECRETARY OF THE TREASURY APPROVED THE SEVERAL ADVANCES AGGREGATING APPROXIMATELY $38,208.62 MADE BY DISBURSING CLERKS TO MR. BIELASKI FOR EXPENDITURE IN SECURING EVIDENCES OF VIOLATIONS OF THE NATIONAL PROHIBITION ACT AND CREDIT WILL BE SUSPENDED IN THEIR ACCOUNTS FOR THE AMOUNT OF ALL SUCH ADVANCES, EXCEPT AS TO THE SUMS PAID BY MR. BIELASKI TO HIMSELF AS SALARY AS HEREINBEFORE CONSIDERED, FOR EVIDENCE OF SUCH AUTHORIZATIONS AND APPROVALS. IF BOTH THE AUTHORIZATIONS AND APPROVALS FOR THE RESPECTIVE ADVANCES WERE NOT HAD OR IF SAME ARE NOT NOW OBTAINED, CREDIT FOR THE ADVANCES, EXCLUDING THE SUMS NOT IN EXCESS OF $7,500 PER ANNUM TO NOVEMBER 30, 1926, PAID TO MR. BIELASKI AS SALARY AND PER DIEM EXPENSES, WILL BE DISALLOWED IN THEIR ACCOUNTS.

IF THERE WERE SUCH AUTHORIZATIONS AND APPROVALS OF THE COMMISSIONER OF INTERNAL REVENUE AND THE SECRETARY OF THE TREASURY, OR IF THEY ARE NOW GIVEN, CREDIT WILL NEVERTHELESS BE DENIED TO MR. BIELASKI FOR EXPENDITURES AGGREGATING $7,264.50 MADE BY HIM FROM SUCH ADVANCES IN MAINTAINING A ,SPEAKEASY," KNOWN AS THE BRIDGE WHIST CLUB AT 14 EAST FORTY-FOURTH STREET, NEW YORK, LESS $2,290.56, NET PROCEEDS DERIVED FROM THE SALE OF THE CLUB, OR FOR $4,973.94. THE AUTHORITY CONTAINED IN THE APPROPRIATION ACTS, SUPRA, TO SECURE "EVIDENCE OF VIOLATIONS" OF THE NATIONAL PROHIBITION ACT CAN NOT BE CONSTRUED AS AUTHORIZING PROHIBITION OFFICERS TO USE THE SUMS APPROPRIATED, OR ANY PART THEREOF, TO VIOLATE NOT ONLY THE EIGHTEENTH AMENDMENT TO THE CONSTITUTION BUT THE NATIONAL PROHIBITION ACT ITSELF BY THE OPERATION OF A PLACE FOR THE SALE AND CONSUMPTION OF INTOXICATING LIQUORS. AN APPROPRIATION MADE TO ENFORCE A LAW CAN NOT BE CONSTRUED AS AUTHORIZING EXPENDITURES THEREFROM IN VIOLATING THE LAW.

AN EXAMINATION HAS BEEN MADE OF OTHER EXPENDITURES MADE FROM THE ADVANCES FOR THE PAYMENT OF INFORMERS, PURCHASE OF INFORMATION, EMPLOYMENT OF ASSISTANTS, RENTAL OF QUARTERS, TELEPHONES, TC., AND WHILE THEY ARE NOT SUPPORTED BY RECEIPTS AS IS CUSTOMARY AND REQUIRED IN OTHER MATTERS THEY APPEAR TO HAVE RECEIVED THE APPROVAL OF THE PROPER ADMINISTRATIVE OFFICERS AND CONSIDERING THE NECESSITY FOR SECRECY IN SECURING EVIDENCE OF VIOLATIONS OF THE LAW, CREDIT WILL BE ALLOWED FOR SAID EXPENDITURES.

THE ACCOUNTS OF A. BRUCE BIELASKI AND DISBURSING OFFICERS SUMMERS, NUTT, AND SIMONTON WILL BE ADJUSTED ACCORDINGLY.